Top 5 common mistakes
people make when purchasing
property in Baja California Sur.
Buying investment property in Mexico
can be very beneficial. These are high
level responses and may require additional dialogue. Do not hesitate
to contact our office. You’ll find our
contact information below.
Mistake #1:
Not Hiring Legal Representation.
In addition to representing your best interests and protecting your legal transactions,
an attorney can be very helpful in saving you
money. This is because attorneys are involved
in many of the different transactions necessary
and have contacts with banks, notaries and the
Mexican government. They are aware of the
most competitive costs and fees involved and
make sure the buyer is given the best possible
prices. Very often one piece of good advice
can save buyers thousands of dollars in tax
or other savings when the buyer eventually
decides to sell the property.
Mistake #3:
US Citizens can not own
Property in Mexico
Most purchasers contemplating buying a
house in Mexico are aware that Mexico has a
“restricted zone” (50 kilometers along Mexico’s
entire coastline, 100 kilometers along all of
Mexico’s natural borders) per Article 27 of the
Mexican Constitution. What many purchasers are not aware of is the Foreign Investment
Law of Mexico (‘FIL’) This FIL is known as
the “Regla-mento de la Ley Inversion
Extranjera y del Registro Nacional de
Inversiones Extranjeras.” Relative to
properties within this prohibited area, the
amended Foreign Investment Law’s intent is
to clearly and narrowly define what is
residential property, what properties must be
in a ‘fideicomiso’ (Mexican bank trust), and
what properties are considered nonresidential and therefore can be purchased by
foreigners in a Mexican corporation.
Mistake #4:
Mistake #2:
Paying the Seller before
the paperwork is in order.
First and foremost make sure the law firm
has experience in the subtlties and nuances
of aquiring Ejido property. For years foreign
purchasers have been persuaded to “purchase”
ejido parcels or beach front lots without fully
understanding that they can’t legally own
ejido property nor can the ejidatarios (those
individuals that have the beneficiary interest
in the land) legally sell it. Hence, all potential
buyers of Mexican real estate should know the
difference between private property and land
denominated as “ejido” Having an attorney to
perform due diligence can ensure you are are
buying the right property.
The sale of real property between Mexican
nationals is a fairly simple and expeditious
transaction via a compra-venta. They are not
concerned nor do they have to be with Mexico’s foreign investment laws. This is not the
case, however, when they sell to foreign purchasers in the restricted zone. Their attitude is,
“Why should I wait for my money just because
you have to get a bank trust. Secondly, this
attitude has been pervasive because some, not
all, real estate agents push it and expect it. If
the seller receives all of his money, the agent
gets paid his commission. Why should the
agent be concerned with whether the buyer
gets his fideicomiso established once he has
received the fee due from the seller? Should
Purchasing Ejido Land.
Copyright ©2013 Bufete Troncoso Attorneys At Law Inc | www.btlaw.com.mx
your due dilligence cause you to withdraw or
cancel from the paid transaction and you have
prepaid the seller some of your costs, the
simple truth is you have given the seller your
money with little or no chance to get it back
other than a lawsuit in Mexico.
Mistake #5:
Not Purchasing Title
Insurance in Mexico
It is often said that it is the responsibility of
the notario to provide title assurance, and that
they have the same requirement of certification as would a title insurance company. That
is true. However, it is not often understood
that in Mexico a title policy not only protects
against liens, encumbrances, and tax issues,
but also against fraud, misrepresentation,
impersonation, secret marriages, incapacity
of parties, undisclosed heirs and other hidden
risk as provided by the policy. Even the best
of notarios or attorneys may be unable to
discover these title problems.
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Complimentary
Consultation
For more information or to have
any questions answered. Please
contact us at:
Phone: +52 (624) 142 4435
E-mail: [email protected]